Top Korean exporters saddled with inventories of $90 billion as of Dec

Productivity and competitiveness of the Korean Inc. have become increasingly doubtful as a study showed key Korean manufacturers saddled with 100 trillion won ($88.6 billion) worth inventory stockpile as of the end of 2018 due to slowed overseas demand.

According to a joint study by Maeil Business Newspaper and market tracker FnGuide, top 20 Korean exporters including Samsung Electronics Co. and Hyundai Motor Co. booked 100.3 trillion won as inventory in their fiscal reports for 2018, surging 12 percent from 89.5 trillion won in the previous year. Revenue by these companies added 4.3 percent on year to 838.4 trillion won in 2018.

The increases in the cost of goods sold and unsold in 2017 more or less matched – 11.1 percent in revenue versus 10.5 percent in inventories.

Industry experts raise alarm for the onset of a vicious cycle from inventory increase that leads discounts to clear warehouse stock, oversupply, softened prices, and a toll on the bottom line.

The top 20 exporters this year are estimated to earn 76.9 trillion won from sales, which would be 27.6 percent off from last year.

Inventory pressure has mounted on bellwether Samsung Electronics due to reduced chip demand from IT multinationals and China. Chip stocks at its wafer bases in Korea and China grew 16 percent on year to reach 28.98 trillion won worth as of the end of last year. Revenue gained 1.8 percent over the same period, suggesting goods unsold were piling up nine times faster than those shipped out.

The warehouse has turned equally crowded at automaking sites.

Inventory grew 9.3 times faster than sales for Hyundai Motor as it struggled in its two key markets of the United States and China. Sluggish sales also pushed up inventories at its auto parts and logistics suppliers Hyundai Mobis and Hyundai Glovis.